Scandinavian Working Papers in Economics
Discussion Papers,
Norwegian School of Economics, Department of Business and Management Science
No 2004/14: Sunspot Equilibria and the Transfer Paradox
Thorsten Hens () and Beate Pilgrim
Additional contact information
Thorsten Hens: Institute for Empirical Research in Economics, University of Zurich, Postal: University of Zurich, Institute for Empirical Research in Economics, Blümlisalpstrasse 10, 8006 Zürich, Switzerland
Beate Pilgrim: Reuters AG, Frankfurt, Germany
Abstract: We show that for international economies with two countries, in which agents have additively separable utility functions, the existence of sunspot equilibria is equivalent to the occurrence of the transfer paradox. This equivalence enables us to provide some new insights on the relation of the existence of sunspot equilibria and the multiplicity of spot market equilibria.
Keywords: Sunspot Equilibria; Transfer Paradox
JEL-codes: C62; D52; F20; F30; O12
25 pages, November 22, 2004
Full text files
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